Falling off a cliff...the worry that REALLY troubles SME directors

1 December 2008

With Government fiddling whilst UK business burns, its distressing to hear story after story of doom and gloom. Good job I am a relentlessly optimistic person, you have to be to do rescue and recovery work!

People are asking me the same questions every day now, "what are sales like for other people? "have they fallen off a cliff"? "I am desperate for cash, my customers are slowing down payment, what can I do"?

These are of course anecdotal and based upon the micro business issues they face, but today the bigger picture started to emerge. Sales HAVE fallen off a cliff, read the excerpt from the BBC news site today below

Record decline in manufacturing

Collapsing new orders have been blamed for the weak figures. British manufacturing shrank in November at the fastest rate since the figures began being collected in 1992. The Purchasing Managers' Index fell to 34.4 from October's figure of 40.7, which was both the lowest level and biggest fall seen on the index. The fall in the figures was based on a collapse in new orders.

Alan Clarke at BNP Paribas described the index as being at "absolutely horrific levels".

"We are already seeing a pretty rapid pace of contraction in hard manufacturing activity in the UK and it is going to get even worse.

Worrying times indeed, I now forecast that cashflow will reach critical levels in the weeks after Christmas, with factory and business shutdowns its easy not to pay your creditors, trouble is your customers won't be paying YOU either.

So manage cash, costs and spending NOW.